I have my music structured a bit differently. On the root of the SD I have separate folder for each genre of music, i.e. Rock, Trance, Dubstep, etc. Then in each of these folders I have other folders with the artists/bands, then in each artist folder I have other folders with the albums and finally in each album folder I have the relevant MP3 files.
Regarding playlists I have a Playlists folder on the root of the SD, next to the music genre folders. Each M3U file is saved in that Playlists folder so when I load the SD card into the infotainment, I play the playlist easy. I assume MIB 2 reads the file path differently than MIB 1 because I never had issues with that. Anyway Windows Media Player has sorted that problem for me so everything works ok now.